Mortgage Rates Cut
Several banks have cut mortgage rates with more expected, following the shock 0.5% cut in the Bank of England’s cost of borrowing.
Halifax, Barclays and Lloyds TSB were amongst the first banks to annouce their standard variable rates would be cut in line with the Bank of England’s 0.5% cut and it is expected that Abbey, HSBC, Nationwide, Royal Bank of Scotland and Standard Chartered, all affected by today’s rescue announcement, will also shortly have to follow suit.
8/10/2008 Comments: 0
Coordinated Rate Cuts
Central Banks around the world have coordinated a shock 0.5% base rate cut in their base cost or lending.
The Bnak of England reduced rates from 5.0% to 4.5%, whilst the US Federal Reserve dropped its rates from 2.0% to 1.5% and the European Central Bank cut rates from 4.25% to 3.75%.
It is thought likely that central banks in Canada, Switzerland and Sweden will also follow suit.
The Bank of England justified the decision because it believes that inflation is set to fall over the coming months. But the coordinated move, which meant the base rate announcement coming in 24 hours earlier than expected, is seen as an attempt to shore up the World’s failing economy.
8/10/2008 Comments: 0
Bank Of England Shock Rate Cut
In a shock move, the Bank of England cut it’s base rate for borrowing by 0.5%, 24 hours earlier than the announcement was due.
The bank has reduced the base rate of borrowing from 5.0% to 4.5%, and announced the decision today, instead of Thursday, as is normal. Other central banks around the world also took the same drastic cut in a coordinated attempt to save the global economy.
The US Federal Reserve reduced its own rates from 2% to 1.5%, whilst the European Central Bank cut rates from 4.25% to 3.75%. It look likely that the central banks of Sweden, Switzerland and Canada could all make the same move.
Tracker mortgages following the Bank of England’s base rate will immediately start to feel the relief, whilst Halifax, Barclays and Lloyds TSB were amongst the first to announce their standard variable rates would be reduced in line with the Bank of England’s move.
8/10/2008 Comments: 0
Northern Rock Swamped By Savers
Since falling into Government hands, Northern Rock has become seen as a safe haven for cash and is being swamped with new account requests.
As a result, it has had to remove half of its savings account range as worried savers remove their cash from Bradford & Bingley, Halifax and other branks that are causing concern to safer bets, such as Northern Rock.
But competition rules prohibit the bank holding more than 1.5% of the market share of the savings market. The current flood of requests is moving it towards this ceiling.
2/10/2008 Comments: 0
Biggest House Price Fall Yet
The Naionwide has announced that it’s figures show the largest drop in house prices in their records.
September saw the 11th consecutive month of falls, losing 1.7% in the month, taking the annual decrease to 12.4%. The average UK property now costs just £161,797.
With the rate of decline holding approximately steady for 3 months, analysts do feel that the bottom of the market may have been reached, or will be shortly.
2/10/2008 Comments: 0
Pressure For Rate Cut
The Bank of England is facing calls for a rate cut after it warned that the credit crisis is set to get worse.
It’s own Credit Conditions Survey report showed that lending to house buyers and businesses were cut far more than expected in the last quarter. And with the growing crisis and falling property prices, lenders are set to hand out less loans.
Retailers are calling for a rate cut to help the economy, but whether such a move would benefit is still to be seen. Whereas lenders might cut rates, penalising savers, their rates for borrowers have been increasing recently at the cost of inter-bank lending continues to increase.
2/10/2008 Comments: 0
10% of Mortgage Deals Axed
A record number of mortgage deals were axed yesterday following the collapse of the Bradford & Bingley building society.
11.4% of all the mortgages on offer to homebuyers, remortgagers and buy-to-let landlords were retracted yesterday alone, acording to Moneyfacts.co.uk. This was a reaction by lenders as they rushed to remove top deals as they feared an increased funding crisis.
The number of mortgage offers available to homebuyers has now fallen to just 2,988, whilst there are just 481 buy-to-let mortgage offers available.
30/9/2008 Comments: 0
Libor Rate Jumps
The cost of the libor rate soared overnight as banks felt the pinch and stopped lending to each other.
The cost of borrowing dollars shot an incredible 4.31 points, up from 2.57% to 6.88%, recording an all time high rise.
The cost of borrowing sterling nearly doubled, icreasing from 3.71% to 6.78%. These rise came in spite of central banks pumping billions of dollars into the lending system to shore it up following last weeks failed bailout of the US banking system.
The effect of this is that regardless of what the Bank of England’s monetary policy committee decide to do next month, the cost of borrowing to the banks has increased and it is therefore likely that the cost of borrowing will follow.
30/9/2008 Comments: 0
Irish Banks 100% Safe
The Irish Government last night offered 100% protection on deposits in Irish bank accounts, including to UK customers.
Last week the compensation level raised from €20k to €100k on Irish banks, including Anglo Irish Bank (AIB), Bank of Ireland, Allied Irish Bank and Post Office.
The guarantee isn’t open ended, the protection is for 2-years only, ending 28 September 2010. The only other institutions to offer a 100% savings guarantee within the UK include the nationalised Northern Rock, National Savings & Investments and the savings accounts of Bradford & Bingley, since yesterday’s announcement, but only until the handover to Santander is completed.
Last night’s announcement does cover all Irish banks and their subsidiaries, unlike last week’s raise. Therefore, the Allied Irish Bank, which uses a UK licence for UK branches, is fully covered.
It is expected that there will be further pressure on Alistair Darling to increase the £35k cover to £50k for UK banks quite soon, as was promised at the end of the summer. Further pressure might be brought to simplify the compensation system, which merges banks under different names that use the same license, for example Halifax, Bank of Scotland, Intelligent Finance and AA Financial Services, which all fall under the same license.
30/9/2008 Comments: 0
Power Giants ’Ripped Off’ Customers
The Government’s new watchdog Consumer Focus is concerned by over charging of people on pre-payment energy meters.
Chief executive of Consumer Focus, Ed Mayo, said: ’People on the lowest incomes have been overcharged millions of pounds for many years.
’In this case people have been ripped off and I think they should be able to claim back the money they have been overcharged.’
Consumer Focus does not have powers to demand refunds, but can apply pressure on the energy industry regulator, Ofgem, to do so.
29/9/2008 Comments: 0
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